Fisker (NYSE:FSR) stock rose about 3% after the small electric vehicle (EV) maker announced a convertible bond offering. The offering could increase to $680 million.
FSR stock opened this morning at $6.12 per share, a market capitalization of about $2 billion. The company lost and ended the period with $652 million in cash.
Fisker Must Produce
Danish designer Henrik Fisker first tried to launch an electric car over a decade ago, . Now his second company is .
Fisker is one of several small EV makers founded in the last decade, aiming to replicate the success of Tesla (NASDAQ:TSLA) in making luxury electrics. Some, like Lordstown Motors, have gone under. Others, like Canoo (NASDAQ:GOEV) and Faraday Future (NASDAQ:FFIE), are now penny stocks. Still others, like Rivian (NASDAQ:RIVN) and Lucid
(NASDAQ:LCID), have started ramping production with deep-pocketed partners.
Fisker’s plan is to deliver its product through Magna International (NYSE:MGA), a that also works for Mercedes Benz (OTCMKTS:MBGYY), with a plant .
Fisker’s flagship product is the , and the first quarter saw initial deliveries of the car in Europe.
Fisker has since announced a smaller car called the , designed for city driving. The company said last month it had 70,000 reservations for its cars, with plans to increase production to 6,000 units per month in the third quarter. Last year Fisker said it would be producing by late in 2023.
Before the loan was announced, Fisker only had enough cash on hand to meet expenses through the end of 2023. The company came public in 2020 , raising $2 billion.
FSR Stock: What Happens Next?
The time for promises in the electric vehicle market is over. Fisker, like its competitors, now faces intense pressure to produce and show operating profits. Once it is known who the survivors are, the time for consolidation will begin.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
